A sweeping sell-off in global bond markets is accelerating, with investors rattled by swelling government debt burdens, tariff disputes, and political instability. Yields on long-term sovereign debt across advanced economies are climbing to levels unseen in years, intensifying pressure on policymakers and reshaping portfolio strategies worldwide.
In Europe, 30-year gilt yields in the UK and long-dated bonds from Germany, the Netherlands, and France are all trading at multi-year highs. Across the Atlantic, the benchmark U.S. 30-year Treasury yield is edging towards 5%—territory last charted in 2006. The surge underscores deep unease about the sustainability of fiscal policies, from Washington’s costly tax cuts to Berlin’s expansionary spending agenda.
Adding to the turbulence, a recent U.S. court ruling has cast doubt on tariff-related revenue streams, further unsettling investor confidence. Political uncertainty in Europe, where coalition fragility and populist pressures are on the rise, has only compounded the sell-off.
Institutional demand for sovereign paper is also weakening, with some large buyers stepping back amid expectations of prolonged inflationary pressures. As a result, a growing share of capital is flowing into equities, with investors wagering that equities may prove more resilient than bonds through the volatile autumn stretch.
Analysts warn that September could be particularly punishing for bondholders, as markets adjust to the convergence of higher-for-longer interest rates, fiscal stress, and geopolitical frictions. For governments already struggling to balance budgets, the market’s verdict is clear: borrowing is becoming costlier, and discipline is no longer optional.